After a successful trial period with a pilot store, Inditex, the large Spanish retail group behind Zara and Massimo Dutti, is to launch a chain of dedicated shops for women’s footwear and other accessories, which has been talked about for so long. Between 20 and 30 stores will open in Spain, Greece and Portugal in the second half of 2008.
The chain is called Uturqüe, which translates to «both» from Latin, and will carry a wide range of fashion accessories, from women’s footwear to hats, glasses, jewelry, bags and a selection of leather garments. This new format is modeled on a relatively successful store concept in Spain called Bimba and Lola, which sells accessories aimed at middle to upper-end female consumers.
Inditex’ vertically integrated structure comprises over 100 companies associated with product management, design and manufacturing. Up to 63 percent of its apparel is made in Europe and 35 percent in Asia. Of the 20 million shoes it sells through 7 different formats, more than 50 percent are made in Spain. This will also be the case for Uturqüe, whose offer will be drawn up by a specific in-house design team.
The name is said to have been chosen to refer to "both" feet or else to "both" women and men, as it has not been excluded yet that men’s footwear will be introduced at some point in the future. Bershka, which started as a women’s fashion brand, now carries a wide range of men’s fashion lines. E-commerce will reportedly be a big part of the business, as it has become for Zara Home, the group's home design retail chain.
The new shoe and accessories stores will have a selling area measuring between 200 and 250 square meters, and will be situated in central shopping areas. The first store will open this summer on Plaza de Lugo in La Coruña, the birth city of the president of the group, Amancio Ortega, and the seat of the company’s head office. Two other stores will open on the chic Calle Serrano in Madrid and on Paseo de Gracia in Barcelona. Other prime locations are being sought out in Athens, Porto and Lisbon as well as across Spain. More openings are scheduled for next year in France, Italy and Eastern Europe.
Uturqüe will be the 9th chain concept in the group’s portfolio. In addition to Zara and Massimo Dutti, Pull & Bear, Bershka, Stradivarius, Oysho and Skhuaban are some of its lesser known Spanish fashion brands.
The fact that the products sold in Inditex’ stores are still largely made in Spain has put the group in an uncomfortable position against competitors like H&M that source their products mainly from the dollar area. While those of H&M have improved, profit margins at Inditex have suffered.
Currently Inditex has 3,700 stores in 68 different countries, 80 percent of which are in Europe, and its results are used as a good indicator of European consumer behavior. The recent general slump in spending hasn’t overly hurt the group, which recorded 15 percent higher net sales of €9.44 billion for the 2007-08 financial year, ended Jan. 31, with 5 percent growth on a comparable store basis. In the past four years Inditex has been growing at annual rates of around 22 percent, or at least 5.5 percent on a comparable store basis.
Net profits climbed by 25 percent to €1.25 billion during the past year, and the group is projecting similar growth patterns for the present one.
Up to €1 billion of the group’s cash gains will be oriented towards the opening of 600 new stores during the year. With 40 percent of turnover generated in Spain, the group will seek to increase its activities on the international level, especially on Asian markets such as China and Japan. Growth is a challenge in Spain, where its penetration has almost reached saturation point and consumption is slowing, but France and Italy still offer possibilities in Europe. The group will enter four new markets this year: the Ukraine, Korea, Egypt and Montenegro.